1. The substantial question in this batch of writ petitions is as to the validity of Section 2 of the Madras General Sales Tax (Special Provisions) Act, 1964. There are also certain other grounds raised for the assessees, who are the petitioners which, in most part, turn on the construction of that Act. All these petitions cover two periods, the one between 1st April, 1955, and 31st March, 1957, and the other between 1st April, 1957, to 31st March, 1959. In each of these cases the assessee concerned, a resident dealer in hides and skins, purchased raw hides outside the State of Madras which he imported into this State and after tanning, sold the dressed hides and skins to local dealers. By G.O. Press No. 2733, Revenue, dated 3rd September, 1955, Rule 16 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, was substituted by a new Rule which specified the single point at which purchases and sales of raw hides or dressed hides as the case may be, were chargeable to tax under Section 3 read with Section 5-A(iv) of the Madras General Sales Tax Act, 1939. Under Sub-rule (1) raw hides and skins were taxable at the point of the last purchase in the State on the amount for which the said purchases were made. Hides and skins dressed outside the State were by Sub-rule (2)(i) charged at the point of first sale in the State on the sale amount. The point of charge was the same for sale of hides and skins dressed in the State but there would be no liability on the first dealer if he proved that the raw hides and skins before they were dressed had suffered tax at the point of the last purchase. The liability to tax in any of these cases was of course subject to the exemption under Section 3(3). The assessees were all charged to tax under Sub-rule (2)(ii) for the relevant years. On 22nd November, 1962, the Supreme Court in Firm A.T.B. Mehtab Majid & Co. v. State of Madras  14 S.T.C. 355 struck down Sub-rule (2) as invalid on the ground that it discriminated between hides and skins imported from outside the State and those manufactured or produced inside the State in contravention of Article 304(a) of the Constitution. The discrimination sprang from the amount of tax levied being different on account of the existence of a substantial disparity in the price of the raw hides or skins and of those hides or skins after they had been tanned, though the rate was the same. Said the Supreme Court :
If the dealer has purchased the raw hides or skins in the State, he does not pay on the sale price of the tanned hides or skins ; he pays on the purchase price only. If the dealer purchases raw hides or skins from outside the State and tans them within the State, he will be liable to pay sales tax on the sale price of the tanned hides or skins. He too will have to pay more for tax even though the hides and skins are tanned within the State, merely on account of his having imported the hides and skins from outside, and having not therefore paid any tax under Sub-rule (1).
2. The sub-rule made a difference between imported and local raw hides and skins and imposed in effect the same rate but on the higher local sales turnover of the former in dressed condition and on the lower local purchase turnover of the latter. That accounted for the discriminatory nature of the tax, the Supreme Court in that case being of the view that the mere circumstance of a tax having been paid on the sale of hides and skins in their raw condition did not justify their forming goods of a different kind from the tanned hides or skins which had been imported from outside. It held :
The similarity contemplated by Article 304(a) is in the nature of the quality and kind of the goods and not with respect to whether they were subject of a tax already or not. We are therefore of the opinion that the provisions of Rule 16(2) discriminate against imported hides or skins which had been purchased or tanned outside the State and that therefore they contravene the provisions of Article 304(a) of the Constitution.
3. This decision led to the promulgation of the Madras General Sales Tax (Special Provisions) Ordinance, 1963, which later stood repealed by the Madras General Sales Tax (Special Provisions) Act, 1963.
4. Section 2(1) provided that for the period between 1st April, 1955, to 31st March, 1959, notwithstanding anything contained in the original Act, tax should be levied from the dealer who in the State was the first seller in dressed hides and skins not subject to tax at their raw stage at the rate of two per cent, of the amount for which such hides and skins were last purchased in the untanned condition. This section again was the subject-matter of attack in Hajee Abdul Shukoor & Co. v. State of Madras  15 S.T.C. 719. The Supreme Court held that the sub-section was invalid as violating Article 304(a), this time on the ground that the rate of tax on the sale of tanned hides and skins was higher than that on the sale of untanned hides and skins. Persons who had purchased raw hides and skins during the period in the Madras State were subjected to tax at three pies per rupee but persons who had purchased raw hides and skins from outside the State and were liable to tax on the first sales of dressed hides and skins paid a higher rate of two per cent, on their purchase turnover of the corresponding raw hides. The difference in rate was thus held to be discriminatory and violative of Article 304 of the Constitution.
5. To rectify the position, the State Legislature enacted the Madras General Sales Tax (Special Provisions) Act, 1964. By Section 2(1) of this Act, the rate for the period between 1st April, 1957, to 31st March, 1959, had been retained at two per cent, but the rate for the earlier period between 1st April, 1955, and 31st March, 1957, has been reduced to one and nine-sixteenth per cent. Pursuant to the provisions of this Act, the Deputy Commercial Tax Officers having jurisdiction have reassessed or have served notices on the assessees proposing to re-fix their assessable turnover for the years in question as detailed therein and reassess them, and the assessees have been asked to prefer their objections if any. They have all, therefore, moved this Court under Article 226 of the Constitution for a rule forbidding the officers from proceeding further or to quash orders of reassessment.
6. The validity of Section 2 of the 1964 Act is assailed on the ground that under the guise of taxing a local sale, it actually and in effect imposes a tax on outside purchase and that, therefore, it violates Article 286(1) of the Constitution. The tax is levied on the first seller in the State of dressed hides and skins which had not suffered tax under the 1939 Act as raw hides and skins, at the rate of the specified per cent, 'of the amount for which such hides and skins were last purchased in the untanned condition'. The tax in form is on the sale but its incidence is on the amount for which such hides and skins were last purchased in the untanned condition. Taking the definitions of 'sale' and 'turnover' and the charging section in the 1939 Act, levy of tax is on the aggregate of the price for sales and/or purchases and the incidence is on the consideration which goes into aggregation related to the particular sale or purchase charged to tax. But Section 2(1) of the 1964 Act while purporting to tax a local first sale of dressed hides and skins, does not take into account the turnover relating to the particular sale but the rate is computed at so much per cent, of the amount for which raw hides and skins were purchased out of which the dressed hides and skins were made which formed the subject of the first sale. We are not called upon in these cases to decide the validity of Section 2 if the last purchase of hides and skins in untanned condition was inside the State. But where such a purchase was made outside the State or was an inter-State purchase, we have to consider whether Article 286 bars or bans the levy on the first local sale but at a rate assessed on the amount of the price or consideration for the last outside or inter-State purchase of untanned hides and skins which after tanning in the State formed the subject-matter of the first local sale. The revenue urges that the effect is not to charge outside or inter-State purchase but the first local sale and that only the amount of tax payable on the first sale is computed on the basis of the turnover of the outside or inter-State purchase. We have no hesitation in rejecting this view. It is not the form but the substance and effect of the incidence of tax that should be regarded in judging the validity of the provision in the context of the bans imposed by Article 286. Obviously the Legislature cannot, do indirectly what it is forbidden to do directly. In our opinion, notwithstanding the apparent levy of tax on the first local sale, it is in substance and effect a tax on the outside or inter-State purchase and the aggregation of its consideration is not merely a measure. The last outside or inter-State purchase is normally a separate and different transaction and the amount of the consideration therefore is as much an integral part of it and not that of the first sale in the State by any means. If the Legislature had intended to tax the outside or inter-State purchase, Section 2(1) of the 1964 Act without doubt effectuates that intention. Even if it did not intend it but only wanted to rectify the position resulting from the last judgment of the Supreme Court relating to differential rates, the true and actual effect of the impost under Section 2(1) cannot be disguised. A tax on sale of goods has its impact on the goods sold and in that sense on the goods themselves. In In re C.P. Motor Spirit Taxation Act  1 S.T.C. 1 39, the Federal Court observed :
Since writers on political economy are agreed that taxes on the sale of commodities are simply taxes on the commodities themselves, it is possible to regard a tax on the retail sale of motor spirit and lubricants as a tax on those commodities.
7. A Division Bench of this Court in Syed Mohamed & Co. v. State of Madras  3 S.T.C. 367 made reference to the observation of the Federal Court in Province of Madras v. Boddu Paidanna  1 S.T.C. 104 that the tax is on the sale of goods, also to the observation of Dalton that a tax on sales or on turnover is only a tax on the commodities sold or turned over, and to certain well known economists and pointed out:
These passages clearly show that the words 'sales tax' are generally understood as importing a tax on the occasion of sale, that it is immaterial whether it is collected in the first instance from the sellers or the purchasers, for eventually it would be passed on to the consumers, and that in either case it would be a tax on sales. It is in this sense that the words 'tax on sales' would appear to have been used in entry No. 48.
8. Both Syed Mohamed & Co. v. The State of Madras  3 S.T.C. 367 and Gannon Dunkerley & Co. v. State of Madras  5 S.T.C. 216 have held that power to tax sale of goods is a power to tax the transaction of sale the integral components of which are the parties to the sale transaction, the agreement to sell and purchase, the consideration therefor, the goods and the passing of property in such goods to complete the sale. It seems to us that if the object was only rectification and to bring about equality in the burden on inter-State transactions in hides and skins the legislation should perhaps have taken the form of a tax on the turnover of the first sale of dressed hides and skins and an allowance of rebate of tax proportionate to the difference in rates to equalise the inter and intra-State burden of tax. Section 2(1) of the 1964 Act as it stands ostensibly applies the rate to sale turnover but factually and in substance brings to charge the turnover of outside or inter-State purchase. To our minds, it is impossible to deny such an impost directly impinges on the outside or inter-State sale which the State is inhibited from taxing. On this view it is needless to approach the question from the standpoint of entry 54 of the Legislative List as to whether the incidence of tax on one transaction of sale or purchase while the legislative intent is to lay it on another transaction is authorised by the entry, whatever be the scope of entry 54 on that matter, after the Sixth Amendment of the power to tax inter-State sales has been shifted from the State to the Centre by entry 92-A in the Union List; and here the transaction of purchase of untanned hides and skins was either an inter-State purchase or an outside purchase. We hold, therefore, that Section 2(1) of the Madras General Sales Tax (Special Provisions) Act, 1964, offends Article 286 of the Constitution and is void and unenforceable in so far as it directs the assessment of rate for the first sale on the amount for which the corresponding untanned goods were last purchased outside the State or in the course of inter-State trade, commerce and intercourse.
9. The other submission made for the assessees are, in our opinion, of no substance. It is said that where the original assessment orders have been quashed by Courts, there could be no question of reassessment, for that implies the existence of an earlier assessment. Madras Acts 11 of 1963 and 37 of 1964, both have used the expression reassessment of a dealer 'who has been assessed'. But the circumstances in which the two enactments came to be made cannot be lost sight of and of which the Legislature is aware. Their purpose was to rectify the defects in view of which Rule 16 was held to be invalid and the assessment orders made thereunder were quashed. Further, notwithstanding the fact that the assessment orders were quashed in some of the cases, factually there had been assessments on the concerned assessees, and in our view, the expression 'has been assessed' is but descriptive. The petitioners are persons who had been assessed though the assessments have since been quashed. We are aware as pointed out in Stroud's Judicial Dictionary, Volume II (Third Edition), 'has been' can be construed as 'is' in the sense of indicating a continuous fact. But the shade of the meaning of the expression also takes its texture from the context, the setting and the circumstances in which it has been used. The 1964 Act uses the expression to spot out the dealer who factually has been assessed and it does not mean that the Act applies only to dealers whose assessments had not been set aside and continued to be in force. Another contention is that the 1964 Act allows the non-assessees complete immunity. The fallacy in it is the assumption that a dealer who is liable under the 1939 Act in respect of his transactions in dressed hides and skins is liable to escape which is not true. The Madras Act 37 of 1964 should be read as part of the 1939 Act which requires every dealer to submit a return and brings to tax. If there are still tax-evaders, that is not because the Act allows evasion or permits immunity. A further point made for the assessees is that reassessment is directed by the 1964 Act (Act No. 37 of 1964) only in respect of dressed hides and skins. That again is not correct, because Rule 16 does charge the purchase turnover and that is also indicated by the first part of Sub-section (1)of Section 2 of the 1964 Act. We, however, agree with the contention that this Act is not a validation Act in the sense that it regularises the orders which are illegal when they were passed. What the Act is intended to achieve is to authorise reassessment under its provisions read with the main Act of dealers who had been assessed but under an invalid provision.
10. The last contention is urged in a different form and it is said that the 1964 Act discriminates between raw hides and skins purchased locally, tanned and sold on the one hand and raw hides and skins purchased outside the State, imported into the State, tanned and sold locally on the other. This is on the assumption that under this Act, the raw hides and skins had not suffered any tax. The point is developed thus. On 10th June, 1963, the Governor promulgated the Madras General Sales Tax (Special Provisions) Ordinance, 1963, which was replaced by Madras Act No. 11 of 1963. Section 2(1) of the Ordinance made special provisions in respect of tax on sale of hides and skins. It stated that notwithstanding anything contained in the 1939 Act or in the Rules made thereunder, the tax should for the period between 1st April, 1955, and 31st March, 1959, be levied (i) in the case of raw hides and skins on the dealer who is the last purchaser in the State and (ii) in the case of dressed hides and skins which had not suffered tax at the raw stage, on the dealer who in the State was the first seller. The second explanation to Sub-section (ii) of Section 2(1) declared that with a view to remove doubts that in respect of sales to which Sub-section (i) applies, nothing in Rule 16 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, should apply or should be deemed to have applied. In Sub-section (1) of Section 2 of Madras Act 11 of 1963 reference to the first item aforesaid relating to tax on last purchase of raw hides and skins in the State was omitted and the second explanation in the sub-section confined its scope in removing doubts by stating that it was thereby declared that in respect of sales to which Sub-section (1) applied nothing in Rule 16(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, should apply or should be deemed ever to have applied. The provisions of Sub-section (1) of Section 2 of the 1963 Act have been re-enacted by the 1964 Act except for the difference in the rate applicable to first sales in dressed hides and skins in the State for the period between 1st April, 1955, and 31st March, 1957. The Ordinance and the two Acts that followed each made a specific provision that except as otherwise provided in each of them, nothing in it should be deemed to revive the 1939 Act or the Rules made thereunder. In the light of these provisions it is urged that as a result there is no provision in order to bring to tax the last purchase of raw hides and skins in the State. In other words, it is said that Sub-rule (1) of Rule 16 stood omitted from the statute book by reason of the Ordinance and neither of the Acts (1963 Act or 1964 Act) had revived it. We do not accept that this is the result. Sub-section (3) of the Ordinance, Sub-section (3) of the 1963 Act and Sub-section (2) of the 1964 Act stated 'the provisions of the said Act (1939 Act) and the said Rules (the Rules made thereunder) would be deemed to be in force subject to the provisions of Sub-section (1) during the periods mentioned in Sub-section (1)', and authority had been given to the concerned officers to assess or reassess in the Ordinance and the 1963 Act and to reassess in the 1964 Act. In our opinion, the scope and effect of the 1964 Act is to revive Sub-rule (1) of Rule 16, for, it says that subject to Sub-section (1), the 1939 Act and the Rules made thereunder shall be deemed to be in force. But the submission for the assessees is that it is not open to the Legislature to revive or keep in force in that manner Sub-rule (1) of Rule 16 without re-enactment. It is said that Sub-rule (1) of Rule 16 was not alive by reason of the Ordinance and if that be so, it could not be taken to be in force by reason of Section 2 of Madras Act No. 37 of 1964. No direct authority has been cited in support of the proposition and we do not think Haji J. A. Kareem Sait v. Deputy Commercial Tax Officer  18 S.T.C. 370, Venkatachalam v. Bombay Dyeing and . : 34ITR143(SC) , Emperor v. Dantes : AIR1940Bom307 and Krishnaraju Reddiar v. Authorised Officer, Land Reforms, Vellore (1967) 1 M.L.J. 179. are of much assistance in deciding the point. In our opinion, it is too broad and general a proposition that the Legislature cannot revive something which it had repealed earlier. Where nothing existed previously, there is of course no question of revival. Revival assumes a pre-existing law which for some reason ceased to have force. Revival in such a case, as we think, is open to the Legislature because in the process is implied re-enactment by reference to the earlier law. Factually Sub-rule (1) of Rule 16 existed. This stood repealed by the Madras General Sales Tax Act, 1959. Madras Act No. 10 of 1963 which amended Section 6'1 of the 1959 Act provides that the repeal of 1939 Act shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under that Act or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability and any such investigation, legal proceeding or remedy may be instituted, continued or enforced as if the 1959 Act had not been passed. Apart from this provision, we pointed out to the provision in the 1964 Act that the 1939 Act and the Rules made thereunder should be deemed to be in force subject to Sub-section (1) of Section 2. Where the Legislature acts within its competency, it can give retrospective or future effect to the law which it makes. Where the law is made for the first time, no difficulty arises if the Legislature says or necessarily implies that it should have a retrospective effect. If a law enacted by it was revoked, subject to constitutional competency and limitation it could revive the Act by re-enactment or by making a provision which directs that the law repealed shall be deemed to have been in force at the relevant time. The last part of it is an instance of revival by reference. The Legislature could have repeated the very words of Rule 16(1) in its re-enactment of that provision or it can take the factual basis of the rule and say that notwithstanding its repeal, it shall be deemed to have been in force. The advantage in that case is that it need not repeat the very words but may adopt them by reference and by the deeming provision reviving the rule and giving force retrospectively and continuously. We, therefore, reject the contention that there is no provision in the form of Rule 16(1) to bring to charge the last purchase in the State of raw hides and skins.
11. Another argument is that the assessing authority has no jurisdiction to reassess in view of Rule 17(3-A) of the Madras General Sales Tax Rules, 1939. That rule says that the powers of reopening an order in relation to escaped assessment can be exercised by the appellate authority within a period of five years from the end of the accounting year. Where the appellate authority has passed an order under Section 11 or 12 of the 1939 Act, the assessing authority should report to such authority as the case may be which shall deal with the escaped assessment in accordance with the prescribed procedure. So far as limitation is concerned, Sub-section (2) of Section 2 of the 1964 Act clearly lifts it. On the other aspect in the context of Rule 17(1-A) and (3-A), we think that in view of the non obstante clause with which Sub-section (1) of Section 2 of the 1964 Act opens, the provisions of this Act are overriding. It is, therefore, competent for the assessing authority to proceed with reassessment. This is also indicated by Sub-section (2) of Section 2 and the requirement of Sub-section (3) of that section that every dealer within a specified time should submit a return relating to his turnover to the authority or officer concerned for reassessment under the provisions of the Act. The reference to the return is clearly to the assessing authority because there is nothing in the original enactment of 1939 or the Rules made thereunder or the amending enactments to show that a return when required to be made should be made to an officer other than the assessing authority having jurisdiction.
12. The next argument is that Section 2(1) of the 1964 Act picks out the periods between 1st April, 1955, and 31st March, 1959, for removing the bar of limitation for reassessment and leaves out the period prior to 1st April, 1955, and that this is discriminatory. We do not think that there is any substance in this contention. One possible reason for the difference is that the Sales Tax Laws Validation Ordinance, 1956, and the Sales Tax Laws Validation Act, 1956, validated the levy and collection of tax made by various States during the period from 1st April, 1951, to 6th September, 1955.
13. On our view of the invalidity of Sub-section (1) of Section 2 as pointed out by us in this judgment, these petitions are allowed but with costs only in W.P. No. 3536 of 1965, W.P. No. 1800 of 1966 and W.P. No. 1907 of 1966. Counsel's fee Rs. 100 in each of them. No costs in the rest of the petitions.